With the end of the year fast approaching I wanted to create a thread to see if there was any advice or recommendations that our members had as it related to year end tax strategies.

As always, I don't want to advocate anything that might not comply with IRS regulations and anyone reading this thread should check with their accountant to verify that any suggested tax strategy is permitted.

That said, here are some thought starters:

-- Can you "re-book" your Used Car Inventory and take a write down?
-- Can you evaluate your Parts Inventory and write down obsolete parts?
-- Are there any last minute donations that make sense?
-- Are there any expenses that you can pre-pay to lessen this year's tax obligation?

jayhawk

12-27-2016 03:02 PM

-we revalue all used cars to nada "loan" value, depending on annual profit, sometimes makes for a great January!

-you could make a case for writing off all parts not sold in the past year, never clear on whether or not you had to scrap them though [we didn't].

-donations are always appreciated

XDCX

01-03-2017 10:05 AM

Quote:

Originally Posted by jayhawk
(Post 38327)

-we revalue all used cars to nada "loan" value, depending on annual profit, sometimes makes for a great January!

-you could make a case for writing off all parts not sold in the past year, never clear on whether or not you had to scrap them though [we didn't].

-donations are always appreciated

Thanks for the information - I like the idea of re-booking the used cars at the end of the year.

Concerning the parts inventory, that's a great question. I wouldn't be surprised if there was an IRS requirement that the parts needed to be scrapped if the dealership wanted to write them off.

bbdrew

01-17-2017 12:43 PM

I don't know exactly the legal requirements to write off parts, but below is the process that I have been instructed to follow when we "write off parts".
1.The parts are itemized in an excel worksheet with the part number, description, qty, cost, and extended cost. This worksheet is printed when "write offs" occur and signed by me the parts manager.
2. Prior to pulling the worksheet a photo of each part is taken showing it in "new" condition.
3. Repeat #2 for all parts on worksheet.
4. The parts are taken out of packaging and destroyed, as much as possible.
5. A photo showing the destroyed parts is then taken and another photo is taken showing the destroyed part in the dumpster.
6. The photos are then stored on a file in the computer, backed up on the cloud, and a secondary cloud backup, and the worksheets and all photos are stored on a USB given to the controller once a year.

tnpartsguy

01-18-2017 11:09 AM

Quote:

Originally Posted by XDCX
(Post 38344)

Thanks for the information - I like the idea of re-booking the used cars at the end of the year.

Concerning the parts inventory, that's a great question. I wouldn't be surprised if there was an IRS requirement that the parts needed to be scrapped if the dealership wanted to write them off.

US vs Thor Power Tool. Scrapped parts MUST be destroyed in a manner that they cannot reenter the stream of commerce.